Bonds issued by the Tyler Food chain have a par value of $1,000, are selling for $1,570, and have 20 years remaining to maturity. Annual interest payment is 14.5 percent (\$145), paid semiannually. Compute the approximate yield to maturity. (Use a Financial calculator to arrive at the answers, Do not round intermediate calculation. Round the final answer to 2 decimat places.) Approximate yield to maturity The Wild Rose Company has $1,000 par value (maturity value) bonds outstanding at 9 percent interest. The bonds will mature in 15 years with annual payments. Use Appendix B and AppendxD. Compute the current price of the bonds if the present yleld to maturity is: (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answers to 2 decimal piaces.) Lance Whittingham IV specializes in buying deep discount bonds. These represent bonds that are trading at weil below par value. He has his eye on a bond issued by the Leisure Time Corporation. The $1,000 par value bond with semiannual payments has 8 percent annual interest and has 17 years remaining to maturity. The current yield to maturity on simillar bonds is 14 percent. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. What is the current price of the bonds? Current price $ b. By what percent will the price of the bonds increase between now and maturity? Price increases by c. What is the annual compound rate of growth in the value of the bonds? Annual compound rate Ron Rhodes calls his broker to inquire about purchasing a bond of Golden Years Recreation Corporation. His broker quotes a price of $1,140. Ron is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 12 percent annual interest payable semiannually. and has 15 years remaining until maturity. The current yield to maturity on similar bonds is 10 percent. a. Compute the new price of the bond. (Use a Financial calculator to arrive at the answers, Do not round intermediate calculations. Round the final answer to 2 decimal places.) New price of the bond b. Do you think the bond is overpriced? No Yes A $1,000 par value bond has a 7 percent coupon, which is paid on a semiannual basis. It matures in either 2 years or 20 years. Current ylelds on similar bonds are elther 6 percent or 10 percent. a. Calculate the price of the bond for the four possibilities. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answer to 2 decimal places.) b. What is the relationship between price and yleid? Price and yield are related c. What is the relationship between bond price changes and time to maturity? Bond prices change for a given yield change. Bonds issued by the Coleman Manufacturing Company have a par value of $1,000. which is also the amount of principal to be paid at maturity. The bonds are currently selling for $550. They have 10 years to maturity Annual interest is 15 percent ($150), paid semiannually. Compute the yield to maturity. (Do not round intermediate calculation. Use a Financial calculator to arrive at the answers, Round the final answer to 2 decimal places.) Yield to maturity Exodus Limousine Company has $1,000 par value bonds outstanding at 11 percent interest. The bonds will mature in 40 years with annual payments. If the current yleld to maturitv is 16 percent, what percent of the total bond value does the repayment of principal represent? Use Appendix B and (Round "PV Factor" to 3 decimal places. Do not round intermediate calculations. Round the final answer to 2 decimal places.) Principal repayment X-Tech issued preferred shares many years ago. They carry a fixed dividend of $10 per share. With the passage of time, ylelds have soared from the original 6 percent to 11 percent (yleld is the same as required rate of return). a. What was the original issue price? (Round the final answer to 2 decimal places.) Original price of preferred share b. What is the current value of a X-Tech preferred share? (Round the final answer to 2 decimal places.) Current price of preferred share c. If the yield on the Preferred stock Index decines, how will the priof of these preferred shares be affected? The price of preferred stock will increase. The price of preferred stock will decrease. The Vinny Cartier Company issued bonds at $1,000 per bond. The bonds had a 30-year life when issued, with semiannual payments at the then annual rate of 14 percent. This return was in line with required returns by bondhoiders at that point, as described below: Assume that ten years later the inflatiodpremium is 2 percent, the risk premium has declined to 3 percent and both are appropriately reflected in the required return (or yleid to maturity) of the bonds. The bonds have 20 years remaining until maturity. Compute the new price of the bond. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answer to 2 decimal places.) New price of the bond